State court in SF rules for landlord over appeal of penalties

Oakland’s system of penalizing landlords for poor building conditions violates California law because it requires the landlord to appeal fines to an officer appointed by the same city agency that imposed them, a state appeals court has ruled.

A 2010 state law requires cities to set up independent appeals boards or to let their City Council hear appeals from property owners, the First District Court of Appeal in San Francisco said in a ruling published Monday as a precedent for future cases. A lawyer for the landlord said the ruling, if it stands, would require a number of cities to change their practices.

“Most cities have complied with state law,” but others, including Oakland, “have failed to comply with orders requiring an independent appeals process,” said attorney Jonathan Wood of the Pacific Legal Foundation, a property-rights organization that took part in the case. He said the ruling means “the old way of letting the enforcement agency decide its own appeals is over.”

City Attorney Barbara Parker’s office did not comment on the ruling. Oakland could ask the state Supreme Court to review the case.

The landlord, Thomas Lippman, owns a three-unit apartment building in the Harrington neighborhood, east of downtown. An inspector from Oakland’s Building Services Division fined him $9,500 in 2010 for alleged violations that included cracked ceiling paint and a water heater installed without a permit.

Lippman appealed the findings to a hearing officer appointed by the Building Services Division, who upheld the fines and also found Lippman responsible for damage that the landlord had blamed on a tenant who was facing eviction.

Oakland had created the appeal process after an Alameda County grand jury criticized the city for allowing a building inspector’s supervisor to hear a landlord’s challenges to the inspector’s findings. Lippman’s suit argued, and the appeals court agreed, that state law requires an independent board to review appeals.

The law specifies that a city or county “may establish a local appeals board,” whose members do not work for the enforcing agency, to hear appeals from property owners, the court said. Otherwise, the law requires the City Council or county Board of Supervisors to consider the appeals.

The city’s lawyers argued that Oakland was following the law, since the hearing officer was not an employee of the Building Services Division. But the court said the law was intended to direct appeals “outside the enforcing agency” rather than having them heard by an officer chosen by “the very enforcing agency whose decision is being appealed.”

Oakland also contended that state law should not override its decisions as a charter city on local housing policy. But the court said protections for “the basic rights of property owners” are “a matter of statewide concern.”

The 3-0 ruling, reversing a trial judge’s decision in the city’s favor, was written by John Kennedy, a Contra Costa County Superior Court judge temporarily assigned to the appeals court.

Bob Egelko has been a reporter since June 1970. He spent 30 years with the Associated Press, covering news, politics and occasionally sports in Los Angeles, San Diego and Sacramento, and legal affairs in San Francisco from 1984 onward. He worked for the San Francisco Examiner for five months in 2000, then joined The Chronicle in November 2000.

His beat includes state and federal courts in California, the Supreme Court and the State Bar. He has a law degree from McGeorge School of Law in Sacramento and is a member of the bar. Coverage has included the passage of Proposition 13 in 1978, the appointment of Rose Bird to the state Supreme Court and her removal by the voters, the death penalty in California and the battles over gay rights and same-sex marriage.